Foreign Takeover Bids in China and the Netherlands : A Comparative Study of Its Legislative Design.

Intro -- Acknowledgement -- Abbreviations -- Tables and Figures -- Table of Contents -- I Introduction -- 1 Background -- 2 Scope -- 2.1 Why foreign takeover bids? -- 2.2 Why state regulations of FDIs and corporate and securities laws? -- 2.2.1 State regulations of FDIs -- 2.2.2 Corporate and securities laws -- 2.3 Why China and the Netherlands? -- 3 Methodology -- 3.1 Doctrinal approach -- 3.2 Comparative approach -- 4 Scientific and societal relevance -- 5 Outline -- II Theoretical Framework -- 1 Introduction -- 2 Why do takeovers occur: corporate law and economic perspectives -- 2.1 Defining the agency problem -- 2.2 Takeovers: driven by the agency problem -- 2.3 Takeovers: a potential antidote for the agency problem -- 3 The fear of foreign ownership -- 3.1 Effects on local employment -- 3.2 Effects on assets of strategic importance and domestic economic network -- 3.3 Effects on high-tech competitiveness -- 3.4 A remark: reflecting upon the fear of foreign ownership -- 4 The role of corporate and securities laws -- 4.1 Shareholders protection -- 4.2 Contestability determination -- 4.3 Power allocation -- 4.4 Interaction between corporate governance and foreign takeovers -- 5 The role of the state in regulating foreign takeovers -- 5.1 State regulations of FDIs -- 5.2 State intervention and protectionism -- 5.3 Keep the regulatory power of the state under control -- 6 Conclusion: building up the comparative framework -- III Legislative Designs of Foreign Takeover Bids in China -- 1 Introduction -- 2 Regulatory framework of foreign takeover bids -- 2.1 Sources of law -- 2.2 Main regulatory authorities -- 3 The role of state regulation -- 3.1 Industrial policies and the sector-based review -- 3.1.1 An "industry catalogue plus strict approval" approach.

3.1.2 Exploring and promoting a "negative list plus pre-establishment national treatment" approach -- 3.1.3 Implications of the deregulated approach -- 3.2 National security-based review -- 3.2.1 A gradually established national security review regime for foreign investments -- 3.2.2 The operation of the national security review -- 3.2.3 Reflecting upon the national security review regime -- 4 China's stock market reforms -- 4.1 An increasingly unified stock market -- 4.1.1 The integration of A-shares and B-shares -- 4.1.2 The conversion from non-tradable shares to tradable shares -- 4.2 An increasingly open stock market for foreign investors -- 4.2.1 From establishing an enterprise to purchasing B-shares -- 4.2.2 From the B-share market to the A-share market -- 4.2.3 From a trivial stake to a controlling stake -- 4.3 Summary: preconditions for the emergence of foreign takeover bids are gradually met -- 5 The role of corporate and securities laws -- 5.1 Typologies of takeover bids -- 5.2 Procedure of takeover bids and corresponding requirements -- 5.2.1 Pre-tender phase -- 5.2.2 Tender phase -- 5.2.3 Post-tender phase -- 5.3 Takeover defences -- 5.3.1 Divisions of corporate power: who has the final say on taking defensive measures? -- 5.3.2 Defensive measures and their legality -- 6 Preliminary concluding remarks -- 6.1 Prominent role of the government in regulating foreign takeovers -- 6.2 But state regulations have been continuously simplified and streamlined -- 6.3 Limited role of corporate and securities laws in defending local companies -- 6.4 But corporate and securities laws are expected to do more -- IV Legislative Designs of Foreign Takeover Bids in the Netherlands -- 1 Introduction -- 2 Regulatory framework of foreign takeover bids -- 2.1 Sources of law -- 2.2 Main regulatory authorities -- 3 The role of corporate and securities laws.

3.1 Takeover Bids Directive 2004/25/EC -- 3.1.1 Aims of the Takeover Bids Directive -- 3.1.2 Pillars of the Takeover Bids Directive -- 3.1.3 A critical reflection: has the Takeover Bids Directive achieved its goals? -- 3.1.4 Summary -- 3.2 Typologies of takeover bids -- 3.3 Procedure of takeover bids and corresponding requirements -- 3.3.1 Pre-tender phase -- 3.3.2 Tender phase -- 3.3.3 Post-tender phase -- 3.4 Takeover defences -- 3.4.1 An overview -- 3.4.2 Preference shares -- 3.4.3 Depository receipts -- 3.4.4 Priority shares -- 3.4.5 Structure regime -- 3.5 Governing takeover defences -- 3.5.1 Enterprise Chamber and the inquiry proceeding -- 3.5.2 Standards set by case law -- 4 Emerging protective measures for Dutch companies -- 4.1 Newly established EU-wide screening framework of inward FDIs -- 4.1.1 Motivation of EU's initiative for a common screening framework -- 4.1.2 Major features of the EU FDI screening framework -- 4.2 Emerging measures to restrict foreign takeovers in the Netherlands -- 4.2.1 Sector-based approach -- 4.2.2 Strengthened defensive arrangements in corporate law -- 5 Preliminary concluding remarks -- 5.1 Prominent role of corporate law in governing foreign takeover bids -- 5.2 Strengthened corporate law instruments for better protection of Dutch companies -- 5.3 The Dutch government is expected to play a role to ward off unwanted buyers -- V Comparative Observations, Conclusion, and Recommendations -- 1 Introduction -- 2 Comparative Observations -- 2.1 Divergent regulatory approaches: corporate autonomy model vs. state dominance model -- 2.1.1 Corporate law remains the predominant instrument to protect domestic companies in the Netherlands -- 2.1.2 China mainly relies on state regulations to filter out unwanted foreign takeovers -- 2.2 Gradually aligned practice in China and the Netherlands.

2.2.1 China deregulates the regulation of foreign investment, while the Dutch government is ready to step in -- 2.2.2 Rules directing the bidding process are to a large extent similar in China and the Netherlands -- 2.2.3 Corporate and securities laws are expected to play a more significant role in regulating foreign takeovers in both jurisdictions -- 3 Conclusion -- 4 Recommendations -- 4.1 Joint efforts should be made to further refine the assessment framework of the deployment of takeover defences in China -- 4.2 China should gradually enhance the flexibility of its corporate law -- 4.3 Established principles to constrain the use of takeover defences should be consistently carried out in the Netherlands -- 4.4 Governments can do more to make regulations concerning foreign takeovers easier for foreign investors to access in both jurisdictions -- 4.5 Security-related terms should be narrowly defined, and remedies within the screening mechanism should be guaranteed in both jurisdictions -- 4.6 International dialogue and cooperation should be encouraged -- A Final Concluding Remark -- References.

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